China has Hollywood’s attention. It wants more

A scene from Mission: Impossible – Rogue Nation, partially funded by Alibaba

Alibaba’s Jack Ma, China’s second-richest person, made headlines last year when he visited Hollywood looking for deals. He met with studio executives such as Sony Pictures’ Michael Lynton and sat courtside at a Los Angeles Lakers game with super-agent Ari Emanuel and actor Jet Li. One memento of the trip surfaced this summer in the form of the Paramount Pictures hit Mission: Impossible—Rogue Nation. Alibaba Pictures Group invested in the feature, which generated USD479 million in global box office through Aug. 30, and got the rights to sell merchandise and tickets to its 367 million customers in China when the film opens there on Tuesday.
The deal with Viacom’s Paramount is one of more than a half-dozen in the past year between U.S. studios and Chinese companies that are quickly putting down roots in Hollywood. Alibaba, Dalian Wanda Group, Huayi Brothers Media, and others want to funnel films through their media outlets at home, as well as deepen their understanding of the lucrative business. “China is trying to learn why Hollywood is so successful,” says Stanley Rosen, a University of Southern California political science professor who studies the relationship between the mainland and the U.S. film industry. China, he says, wants to master the business “from the bottom up.”
Hollywood is happy to help. It needs the cash plus access to theaters in China, where the government limits the number of imported movies and controls how they are released. Such connections are crucial since China, projected to overtake the U.S. in box-office receipts by 2020, accounted for most of the growth in global movie ticket sales last year.
China’s would-be moguls hope to use stronger Hollywood ties as a way to make even more money off entertainment. When Mission: Impossible opens there, Alibaba will sell tickets online through its Taobao Movie unit, one of the country’s major ticketing platforms, which offers advance seat selection. People can pay using Alipay, Alibaba’s version of PayPal. The company also is planning to build China’s answer to Netflix and HBO, via a new service called Tmall Box Office.
Alibaba acquired a company called ChinaVision Media Group in 2014 to help it enter the business and renamed it Alibaba Pictures. The company sold HKD12.2 billion ($1.6 billion) in stock in June. Alibaba Pictures shouldered an undisclosed portion of the $150 million cost of making Mission: Impossible and said it’s looking for more ways to invest in Hollywood.
State-backed China Movie Channel also invested in the spy flick, saying it would promote the film and sell tickets online. In a first for U.S. audiences, the names of both Chinese companies were displayed in the opening credits of the movie, following the century-old practice of studios like Paramount.
People close to Alibaba say Ma’s strategy is to invest in specific films, rather than in studios. But real estate mogul Wang Jianlin, China’s richest man, is making bigger bets on infrastructure. Wang’s Dalian Wanda Group operates the world’s largest chain of movie theaters and is building the planet’s biggest studio theme park, Qingdao Oriental Movie Metropolis, on the coast of Shandong province. Wanda controls the No. 2 U.S. theater chain, AMC Entertainment Holdings, and last year bought land in Beverly Hills, where it plans to erect a $1.2 billion complex it calls its “first important step into Hollywood.”
Wang, who’s talked of buying stakes in studios Lionsgate and Metro-Goldwyn-Mayer, wants to control 20 percent of the global film market by 2020.
Even the Chinese government is getting in on the action. Besides Mission: Impossible, state-run China Movie Channel, the country’s No. 3 TV network, invested in Paramount’s Terminator: Genisys. China Film Group, the government-run distributor of all foreign movies, took about a 10 percent stake in Universal Pictures’ car-­heist thriller Furious 7, which cost $190 million to make and grossed $1.5 billion globally—a quarter of that within China.
Cain says China’s government is able to use its control over its lucrative home market to influence U.S. studios and exert soft power—the kind of cultural influence that’s made Hollywood a global ambassador for America. China Film invested in The Great Wall, a thriller starring Matt Damon and Willem Dafoe about an elite force making a last stand for humanity on China’s snaking barrier. It’s targeted for a November 2016 release by Universal. Says Cain: “On a broad scale, China is steadily gaining more and more influence in Hollywood, and you won’t see a Chinese villain probably ever again in a Hollywood movie.” Anousha Sakoui, Bloomberg